The US pessimism on the timing of exit from the pandemic and its economic consequences has infected the European lists, which close an uncertain session in the deep red since the first trading.
Piazza Affari loses 2,14% and drops to 17.183 basis points, weighted by Exor, -7,21% and by the banks. The credit sector also knocks out Frankfurt, -2,62%, after the disappointing quarterly report by Commerzbank (-7%). In black jersey, Paris -2,85%; losses are slightly smaller in Madrid -1,9% and London -1,55%.
The definitive push to the fragile European sentiment came in the afternoon from Wall Street, which started off in decline and is accelerating downwards, after an attempt by the Nasdaq to change sign. What weighs above all is the concern about the timing of the end of the lockdown and the consequent recession.
After yesterday's warning from virologist Anthony Fauci, on the risks of an accelerated exit, Fed Chairman Jerome Powell today said that the future of the US economy is "very uncertain" and subject to significant risks due to the pandemic and the economic recovery could take longer than expected. The US unemployment rate is expected to hit a high in May before falling in subsequent months, but will likely remain at levels above those seen before the Covid era. The central banker reiterated that he is not considering negative interest rates, at least for now.
The weight of this phase is also reflected in the numbers of industrial production in the Eurozone which, according to Eurostat, recorded its worst monthly drop in March: -11,3% on month; -12,9% the trend. For Germany, a major exporter of capital goods and consumer durables, the contraction is 14,2% compared to March 2019, while for Ireland, a food producer, there is a surprising 25,3% increase . Italy is the worst in the standings, with -28,4% estimated by Istat. To counter the dramatic economic drift and in the light of the currently comforting data on the trend of infections, work continues on reopening in Italy and, despite the many political divisions, we look with hope at the awaited relaunch decree.
The session is therefore positive for bonds: the spread between Italian and German ten-year bonds drops to 231 basis points (-2,89%) and the BTP rate drops to 1,79%. Auctions are also doing well, but with rising yields. The Treasury has assigned all 9 billion euros of the offer: the fifth tranche of the three-year BTP maturing June 2023 (range offered 4-4,5 billion), yield 0,87% from 0,86% in mid-March; the eleventh tranche of the 7-year BTP maturing January 2027 (range offered 2-2,5 billion), rate of 1,53%, from 1,37% in mid-March; eighth tranche of the 20-year BTP in March 2040 (range offered 0,750-1 billion), yield 2,49% from 1,97% in mid-March. Finally, the sixth tranche of the off-the-run BTP in March 2,23 with a residual life of 2035 years, issued in September 15 (offered range €2018-0,750 billion) was placed at a rate of 1%.
In Piazza Affari the heavy reductions of the banks and of the Agnelli holding set the law. Exor has paid the price of the news, given yesterday after the market was closed, that the French company Covea will not honor "the commitment to acquire PartnerRe according to the terms established by the memorandum of understanding (Mou) announced on March 3, 2020".
The list of banks in red starts with Madiobanca, -4,43%. Fitch adjusted Italian lenders after cutting the country's sovereign debt rating. The long-term opinion on Mediobanca was lowered to “BBB-” from “BBB”, a decision similar to that communicated yesterday evening on Unicredit (-3,85%) and Intesa Sanpaolo (-1,91%). The outlook for the three institutes is "stable". The agency cut the rating on Ubi (-3,8%) to "BB+" from "BBB-", maintaining the positive watch rating linked to the public exchange offer launched by Intesa.
Profit taking knocks out Finecobank, -4,1%. Heavy decline also for Tenaris -4,09%. Poste Italiane fluctuated, -4%, following the quarterly which highlighted profits down by 30% in the first three months.
Purchases crown Diasorin +7,48%, queen of the price list. The diagnostics company closed the first quarter of 2020 with a turnover of 174,6 million euros, up 2,3% on the same period last year. Net income decreased from 40,4 million to 37,7 million (-6,6%). Given the general situation, Diasorin has withdrawn its 2020 guidance, reserving the right to update it when the evolution of the economic picture is clearer.
Good A2a +2,15%, still in the wake of the results presented yesterday; Recordati +1,32%; Banca Mediolanum +1,79%. Terna rises by 1,11%, thanks to the positive accounts in the quarter. Down Mediaset, -2,99%, after the results announced this morning. On the currency market, the euro-dollar is stable at around 1,084.
Among raw materials, oil is trying to rear its head again after the unexpected drop in US weekly inventories, but at the moment Texan crude, delivered in June 2020, is losing 0,74 2% and trading at 25,62 dollars a barrel; Brent contract for July 2020 delivery loses 1,07%, 29,66 dollars a barrel. Gold appreciates: 1718,15 dollars per ounce (+0,65%).
